Why Corporations Are Psychotic

Senator Bernie Sanders echoed the sentiments of many last week when he called for a constitutional amendment to repeal the notion of corporate personhood. This issue jumped into public consciousness last year after the Supreme Court, in its Citizens United decision, effectively allowed unrestrained corporate influence in American politics, based partially on the idea that corporations are legally "persons" with constitutional rights. Sanders, in calling for the constitutional amendment, declared: "This is an enormously important issue, and how it is resolved will determine, to a significant degree, the future of American democracy."

What is it about corporate personhood that so concerns Sanders and many others? That question could be answered many ways, but perhaps this is most concise: Corporations are psychotic.

If corporations are indeed "persons," their mental condition can accurately be described as pathological. Corporations have no innate moral impulses, and in fact they exist solely for the purpose of making money. As such, these "persons" are systemically driven to do whatever is necessary to increase revenues and profits, with no regard for ethical issues that might nag real people.

But, you say, corporations are owned and managed by real people, so surely immoral corporate actions might be inhibited by them? Well, not really. First of all, the officers and directors who run corporations are actually duty-bound to act in the corporation's best financial interest, and that means they are obliged to do whatever they can within the law to make money. Thus, this fiduciary duty requires corporate management to set aside ethical niceties when they get in the way of corporate profits. This is why tobacco companies market their products to kids when they can - only laws prohibiting such conduct will keep them from doing so.

This is especially true when we are dealing with large, publicly traded corporations. Whereas a small corporation could have local ownership, management, and community roots that might resist the drive for profit in certain situations, publicly traded corporations almost always answer to institutional investors and have tremendous pressure to produce short-term profits. The management chain in a publicly traded corporation is necessarily geared for profit, not ethics.

Thus, the entity is a "person" with a totally self-absorbed psyche, a narcissistic "person" that has enormous resources to advertise and market itself to the public, to hire professionals of all types to influence public opinion, to litigate and lobby as needed, to ruthlessly pursue its goal of revenue and profit, and to join other corporations and industry associations in crushing any opposition posed by mere individuals or public interest groups.

But hasn't it always been this way? Isn't that what capitalism is all about - corporate interests driving the economy?

Actually, no. Corporate libertarians would have you believe that somehow corporate dominance is entirely consistent with the values and vision of the Founding Fathers, but this is pure myth. The framers believed in limited government and free markets, but corporations were almost non-existent in the early days of the Republic. Unlike today, one could not form a corporation simply by filing a few papers with a government office; instead, permission from the government was needed (usually via an act of the Legislature) and was granted only upon a showing that the proposed corporation would be in the public interest. When corporate formation was allowed, strict terms and limitations were demanded.

Corporate formation was viewed skeptically in those days because corporations were correctly recognized as dangerous. Unlike sole proprietorships or partnerships, corporations allow investors to pool huge sums of capital and pursue profits while remaining immune from personal liability. Thus, if I own shares of XYZ Corporation and the company breaches a $10 million contract obligation, there is no chance that I will be personally liable on the contract. If I own a sole proprietorship or partnership that breaches such a contract, my personal assets are at risk.

This immunity makes the corporate structure extremely attractive to investors, even absentee investors, which means publicly traded corporations can attract enormous amounts of capital, which in turn results in their wielding great economic power. In modern society where corporations are widespread and commonplace, this economic power enables them to have great social and cultural influence, defining to a large degree how we live our lives and even the values we hold as a society. And of course economic power easily translates to political power as well.

It wasn't until the latter half of the Nineteenth Century, long after the framers were dead, that corporate interests began to reshape the social, legal, and political environment so that their interests became paramount, far more important to politicians than the interests of ordinary citizens. Corporate personhood was a key part of this scheme.

Thus, while corporate libertarians are quick to point out that the framers and other intellectuals of the founding era were wary of excessive governmental power, they conveniently neglect to mention that concentrated corporate power was also viewed skeptically. In fact, Adam Smith, whose "Wealth of Nations" is often cited by corporate apologists as validating "free markets," warned against unrestrained, concentrated corporate power and instead encouraged small-scale, local economic activity. Published in 1776, "Wealth of Nations" predates the rise of corporate power, and suggestions by corporate libertarians that the book somehow supports the notion of corporate dominance are either mistaken or outright dishonest.

It's worth noting that libertarians have no right to claim that a laissez-faire environment would allow unregulated corporate power. Since corporations themselves are a fictitious creation of government, a true libertarian environment (with minimal government) would find them unnecessary and somewhat repugnant. Thus, ironically, at their essence corporations are a creation of government meddling.

The pathological and narcissistic nature of corporate "persons" is reason enough to deny them fundamental constitutional rights that should be reserved for flesh-and-bone persons, but the fact that they also wield economic resources far in excess of those available to real persons magnifies the need to restrain them. Author David C. Korten calls the claim by corporations for constitutional rights equal to those of humans a "legal perversion," saying that "corporations should obey the laws decided by the citizenry, not write those laws."

Korten's statement alludes to why this issue is so critical to effective democracy. Because corporate interests have immense resources that enable them to participate in lobbying and litigation, they effectively control the governmental machine. If individual citizens today feel powerless and cynical about politics and government, who can blame them? Participatory democracy is not alive and well in America, because pathological corporate interests have complete control of the system. This is why Sanders's declaration, that the future of American democracy may rely on the outcome of this issue, is not an overstatement. What kind of "persons" will control democracy - corporate or human?

The Tea Party and Corporate Power

The call by Sanders for a constitutional amendment cries out for popular support, and any mention of populism nowadays calls to mind the Tea Party. Progressives tend to dismiss Tea Party activists as ignorant and/or deluded, but we should realize that the Tea Party has a few (very few) valid points. At a minimum, the Tea Party is correct in saying that American democracy today would be unrecognizable to the framers.

In their speculation of what the framers would think about today's America, however, Tea Party activists make the mistake of not considering the question fully. They focus almost exclusively on the singular issue of downsizing government, completely ignoring other aspects of modern America that would grab the framers' attention. Surely, if Adams, Jefferson and Madison could be magically transplanted to modern America, their actual assessment of society would be much more comprehensive than critiquing the tax system and size of government.

For example, surely the aspect of modern society that would first preoccupy the framers would be our advanced technology, not our governmental structure. Only after marveling for days or weeks about modern technology, from flying in airplanes to sending emails, would the framers' attention eventually turn to government. Then, of course, in analyzing government, they would certainly assess its expanded role in the proper context, in light of today's much more complex technological, economic, and social realities.

Would they feel that government has gotten too big? Perhaps - especially the military. But it's just as likely that they would conclude that much government expansion - the FDA, the FCC, the FAA, the EPA, Social Security, etc. - are logical results of technological and social development. Of course, all we can do is speculate.

But what the Tea Party ignores is that the framers would surely be aghast at the enormous power that Americans have ceded to private corporate institutions. The time-traveling framers would most likely assess American democracy as being ineffective and Americans themselves as being largely uninformed, passive, distracted by petty consumption, and incapable of critical thinking. They would see American politics and society as overtaken by corporate interests that dictate public and social policy to the private citizenry.

If only the Tea Party could see beyond its simple "limited government" mantra to consider such matters, its populist energy and enthusiasm might be put to good use in challenging the corporate "persons" who own and control American democracy and society. By fully considering their own hypothetical, Tea Party activists would find a new outlet for their angst.

You can bet Sanders will be met with much opposition in his call for a constitutional amendment. Much of that opposition will have roots, overtly or covertly, in the corporate establishment that he seeks to tame. Time will tell which type of "persons" - human or corporate - win this struggle.

Text copyright 2011 Dave Niose

FURTHER READING ON CORPORATE PERSONHOOD:

Joel Bakan: The Corporation - The Pathological Pursuit of Profit and Power

It's an overstatement to say CU has "nothing to do" with corporate personhood. The article is not an analysis of the CU decision, but rather mentions it briefly to point out that it raised the public's consciousness about the personhood issue, which is certainly true. The CU decision would have been impossible without the concept of corporate personhood having already been established (the article points out that corporate personhood has been around for well over a century), so it's a bit of a reach to say that the decision has "nothing to do" with it.

The tea party movement will never challenge corporate power since it was CREATED by corporate power and FINANCED by corporate power. It's basically just the John Birch Society for the post-communist era. If you are a politician and you want to challenge corporat power, be prepared to end up like John or Robert Kennedy or Paul Wellstone.

I have seen a recent convergence of Humanism and Libertarianism, particularly from the Center for Inquiry. This was exemplified by the recent editorial "The myth of surplus wealth".
This, in part, reminds me of why I reject the association.

What makes me laugh about the Tea Party is that the anti-war movement has basically been saying the same thing since the Bush era. Where were these people when the Patriot Act destroyed the constitution? I guess political identity is more important than the constitution. As long as a Rep is doing it, it's okay.

I was horrified to see that you linked the term "psychotic" to narcissism and psychopathy. Psychopathy isn't the same thing as being psychotic. I believe you meant to say "psychopathic" in your title, *not* "psychotic".

You're contributing to inaccurate and dangerous stereotypes, as I discuss here:

Sorry to horrify you, Scott! First, the article does not equate narcissism and psychosis, though it states that both terms could be applicable to the corporation as a person. One can be both psychotic and narcissistic, correct? Also, obviously, since we're talking about a non-living thing, the "psychosis" and "narcissism" are figurative, not literal.

It's all good Dave. I know you weren't using the terms literally, but I felt there was much room for confusion between psychosis and psychopathy. To prevent confusion, I wrote a post clarifying the important difference between the terms:

Hi DN. Interesting concept that corporations are psychopathic/pathological in their behaviour. I have to agree with Dr Kaufman that looking at the definitions of the words, psychopathic would be a more accurate and correct word choice. As your examples and elaborations are on the theme of narcissism and psychopathy rather than psychosis, the result is that the article's title says X, but it then goes on to argue Y.

Your piece would be more accurate and hang together more tightly if you simply changed all incidences of "Corporations Are Psychotic" to "Corporations Are Psychopathic". And you would be helping to educate the world on the correct usage of the terms :)

That's a rather irrelevant comparison. Corporations tend to support republican candidates who tend to pass policies that support corporations' bottom lines. Even beyond this point I think your comment doesn't address the author's core argument of psychopathy of corporations in the sense that they only care about their bottom line.

The big difference between a union and a corporation is a union is bound by the interests of a large group of people and is generally interested in furthering the rights of workers whereas a corporation is only bound by profit and any actions directed towards respecting and furthering the rights of individuals that occur are only byproducts of a drive for profit.

I certainly respect your right to disagree with the author, but unions really have no relevance to this article.

Unions are simply an assembly of people looking out for their own well being. Unions protect their worker's safety, well being and yes bargain for the best wages profitable. I think there is a large difference between a union and a corporation whose sole purpose is to produce earnings.

You can say any recently elected democrat is largely due to union support, why pick Obama? And the only point is that there is resistance to corporate domination. And logically where would that fall besides any type of organized labor. It's not really much of a point at all.

And I own a corporation, and am not a union member and do largely agree with this article and think it was well written.

Just another off-the-rails right-wing union basher decrying that a teacher, tradesman, or police/fireman should earn a decent wage and have decent working conditions. Unions are a horror to the psychotic corporate "person" as is anything that cuts into their profit from plundering the earth and exploiting real flesh and blood humans. Of course, you can't fight your enemy in this realm unless you have those - like our union bashing friend, passionately willing to fight against their own self-interest, and who fail to realize unions built this nation (not corporations), and many of the benefits they themselves enjoy from their psychotic corporate employers (overtime, health care, paid time off) were fought for (literally - and to in some instances death) by union members of yesterday from the psychotic and brutal "robber baron" corporations. It's a shame the effect of Fox "News" and conservative AM hate-jock radio has on some.

Feel free to try to interest the Tea Party in this issue. I find it hard to imagine they'll join in. Consider Warren Buffett's statement the effective tax rate on his $46 million income was 18% and the effective tax rate on his $60,000 secretary was 30%. Even if Tea Party members advocate a "flat tax" one might suppose they'd be in an uproar about paying a higher rate than billionaires. But to the best of my knowledge, the Tea Party's motivations are such that they haven't made an issue of it.

"Thus, ironically, at their essence corporations are a creation of government meddling."

Who are those institutional investors? So, corporations and government both were viewed in a skeptical light by the founders. And yes, there were corporations in the early days, take the East India Company, the one that sparked the real Tea Party in Boston.

Is it just me or do other see that the 'left" blames the corporations and the "right" blames government while the reality is they are joined at the hip. Both Tea Party activists and Progressive activists make the same mistake of "not considering the question fully" and as long as the R/L parameters hold sway the dialog, such as it is, will stay the same.

You are exactly right, and people that really know what is going on will not align themselves with a party but with principle which is why so many have gotten behind Ron Paul and the Austrian economists. There is also a great degree of evidence that our modern day Presidents (Bush/Obama/Romney) are being shoved down our throats (in an unsavory way)by the very same establishment that props up this government/corporatist alliance and benefits from it. When people wake up and realize that devotion to a party is destroying the political system, and that we are rapidly becoming a very dangerous one party system, maybe we can work on restoring our economy and regaining our freedom. Until then, we just hang in the balance due to our blind devotion to what we think is reality.

I was disappointed that you marred an otherwise important analysis by confusing psychotic with psychopathic. The two are completely different.

Citizens United expanded the rights of corporations so extensively it essentially crushes the rights of natural persons. The Court went far beyond any case or controversy before it to sweep away about a century's worth of laws and allow corporations to give unlimited amounts of money anonymously. Furthermore, there are almost no laws against lying in political advertising, and this flood of money has been used largely to inundate campaigns with false flag organizations - make believe populism - touting alarmist and untrue claims.

The result has been that candidates who support the interests of the people over corporations lose. Our government is so lopsided in favor of corporations two of our industries - health insurance and firearms - cause nearly eighty thousand unnecessary deaths a year. Can you think of any living dictator killing nearly eighty thousand of his people every year? And yet we are virtually powerless to do anything about it, the corporations have that much sway over both our elected officials and our corporate media.

Unions on the other hand exist to make sure people who are otherwise powerless have a voice. When corporations give money, it's somebody else's money - your and my retirement savings for example - and it's to protect only the interests of their largest shareholders and their executives at the top, often times diametrically opposed to the interests of rest of their shareholders and employees as well as the public at large.

It is an untenable situation, as the operation of corporations and the wealthy people who control them can be very well understood by reading up on Robert Hare's work on psychopaths.
The behavior of corporations (and the wealthy people who control them) in the public and political realm is very much like the behavior of psychopaths as described by those who study them.

Though the terms psychopaths and sociopaths are used interchangably, strictly speaking psychopaths are worse, more organized, more congenital, more diabolical, completely without empathy. Sociopaths are more cultural and environmental in origin, more disorganized and have some capacity to feel empathy for those within their intimate circle. http://bit.ly/aMwSSx

I suspect bigots will someday soon be treated as a third level of the same phenomenon, as they also involve dehumanizing and abusing others. It's appropriate, too, because corporations today, like psychopathic leaders in history, flagrantly foment hatred and bigotry as part of their campaign to control the political process and fatten their profits.

It is the inherent capitalist nature of corporations that forces the psychopathic race to the bottom, strictly driven by maths and economics.
Say a moral public corporation limits it profits to 10% to better serve it's community, it doesn't charge to much for good product and it pays good wages, this profit margin defines it capital value.
Now along comes a psychopath, a snake in a suit, he goes to a finnacial institution, borrows money and pays more for that moral corporation than it's capital value as defined by it's profits is worth, something between 20% and 50% percent more.
After buying that moral corporation he dumps that debt, what he borrowed back on the corporation, so now it is making between a 10% and 40% loss (this he blames on unions and government rather than on his borrowings).
That loss needs to be recovered so he charges more for worse product, he screws down wages, he fires as many people as he can, he shifts labour to third world countries and just it case it all collapses he pays himself an enormous salary with a golden parachute escape clause.
Do you recognise the business model, it's reality, it is what actually happened to corporations all over the world over the last fifty years.
They are toxic enterprises because capitalism and the vagaries of human genetics (narcissits and psychopaths) ensures that is the direction in which they will evolve.

leftists believe there are no psychopaths or any sort of bad people in their team.

There are no socialist psychopaths , there are no psychopath communists, there are no psychopath union leaders, there are no psychopath democrat, there are no psychopath liberals, there are in fact NO bad people on the left, NONE ZERO NIET ZILCH,

according to leftists - such as the author of this piece - only right wing people are messed up in the head, and can be evil.

and the left claims to be the ones who are tolerant and open minded.

And I thought people who have a distorted view of reality had some mental problems

Corporations, if they are deemed 'persons', are not exempt from criminal laws which protect the individual (real-person) from coercions, violence, deceits and forced 'agreements' by any other person, or entity. This means if a 'corporation' acts in ways harmful to a real person, then it must be held to the same laws as are for natural persons, which means they may not coerce, deceive, or violate that person's natural rights, such as protected by our Constitutional laws. Our Bill of Rights should apply to both individual-persons and corporate-'persons' equally. Then, if either acs in ways that are harmful to others, ie. coercive to others, then let them be held responsible for their actions. Moral behavior, in that case, is held equal for both, wether a natural person or corporation. There is no need for a Constitutional Amendment, if the laws protecting individuals from criminality apply to corporations equally.

In the article it says: "First of all, the officers and directors who run corporations are actually duty-bound to act in the corporation's best financial interest, and that means they are obliged to do whatever they can within the law to make money."

If the directors and officers of a (limited liability) corporation are "duty-bound" to gain the best financial interest, "to make money", then what makes them different from Mafia or drug lords, who are likewise 'duty-bound' for their 'best financial interest'? If 'natural' persons can be prosecuted for unethical and criminal activities, why can't the 'natural' corporate person be prosecuted for the same? If they can, then whether or not corporations are psychotic takes second row. First row is they are held to the same laws, which means the 'limited liability' of corporations may apply to the shareholders, but officers and directors are not protected, IMO.

"Would they feel that government has gotten too big?...likely that they would conclude that much government expansion - the FDA, the FCC, the FAA, the EPA, Social Security, etc. - are logical results of technological and social development. Of course, all we can do is speculate."
And speculate you have,"Logical results"? I am thinking they might conclude that we wrongly gave way too much power to huge bureaucracies by plundering the citizens. And that these very same entities put in place to supposedly protect us, have become so corrupt by aligning themselves with the corporatists and special interest groups that they now do way more harm than good. That we have been complete morons to put our trust in government's schemes to expand, and thus have strayed so far from the intent of the Constitution's purpose to limit a big centralized government that we don't deserve the freedom and Rule of Law that they worked so hard to give us. They would be ashamed.